Fed’s Kashkari says labor shortages still a big issue for business

FILE PHOTO: Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank’s headquarters in Minneapolis, Minnesota, U.S., January 10, 2020. REUTERS/ Ann Saphir

By Michael S. Derby

NEW YORK (Reuters) – Federal Reserve Bank of Minneapolis President Neel Kashkari said on Wednesday that job market demand remains strong and underlying inflation pressures probably have not peaked yet.

“I’ve seen very little evidence in my region that the labor market is softening,” Kashkari said in a virtual appearance. “The number one issue I hear from businesses small and large is that they’re struggling to find workers, how they’re having to pay more wages to keep their employees and to attract employees.”

On the inflation front, Kashkari said the surge in overall prices may have hit its high point but underlying pressures are a different story.

Inflation stripped of food and energy costs, “I’ve not yet seen much evidence that that has peaked,” he said.


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